Judge cuts lawyer fees in half in franchise fee case

Thursday, October 24, 2013 3:38 PM

A Polk County District Judge Thursday ruled that the City of Des Moines will have to pay legal fees of $7 million in a nearly 10-year legal battle that it lost regarding a franchise fee itsought to place on residents’ utility bills.

Judge Joel Novak ruled that plaintiff Lisa Kragnes’ lawyers were entitled to $7 million in legal fees for their work in the class-action lawsuit.That was less than half of the $15 million they had sought. Although he reduced the legal fees, Novak commended Kragnes’ lawyers: “the work of the class counsel has been exemplary.”

Earlier, Novak had ruled that the city owed residents a $40 million rebate of the franchise fee it collected.

Brad Schroeder, co-counsel for Kragnes, said in a press release: “Today’s ruling resolves some of the last remaining questions of the case and allows the refund process to move forward. We appreciate that the judge acted expeditiously to keep this case on track and move the refund process forward.”

Read how Schroeder, a divorce lawyer, financed the multi-year legal battle in this Business Record article.

In his ruling, Novak wrote: “This case should send a message to all cities that no matter how well-intentioned their conduct or the purpose for which the money taken from its residents is used to benefit the residents, cities in this state must adhere to the rule of law.”

Under the ruling, a refund administrator, Rust Consulting, will distribute claims forms in the next eight to 10 weeks and residents will have 150 days to file claims.

Iowa State Bar Association President Guy Cook said in a press statement that “lawyers, like everyone else, are entitled to be fairly paid for their work.”

He said the judge used established legal guidelines to decide a fair payment of legal fees while striking a balance with residents of the city entitled to refunds.